Most cities and jurisdictions are not sustained by large catalytic redevelopments. On the contrary, they are typically built “block by block, or even lock by lock,” by small to medium-sized development businesses accomplishing significant infill developments that contribute to the urban environment, asserted David Kitchens, principal in charge of Cooper Carry Architects’ Alexandria, Virginia, office, in his introduction to a ULI 2010 Fall Meeting session entitled, “Entrepreneurial Development Strategies for Targeted Infill.” These firms, commented Kitchens—who moderated the session—help build community by purchasing underperforming or passed-over land for which they have an informed, specific, often creative and passionate vision—and then overcoming a mountain of obstacles to implement that vision. Panelists discussed how they are doing just this, presenting examples of infill developments in New York City and the Washington, D.C. area.
Robert Youngentob, president of Bethesda, Maryland–based EYA, described his firm’s Capitol Quarter project, a 323-unit, seven-block, mixed-income residential infill project in Southeast Washington, D.C., where workforce and public housing units are integrated into—and indistinguishable from—market-rate homes that are selling at base prices ranging from $650,000 to $750,000, at a rate of more than five sales per month. Phase I is complete, and the infrastructure for Phase II is currently under construction. When complete, Capitol Quarter—which is part of the larger Capper/Carrollsburg HOPE VI project—will contain 154 market-rate townhouses, 70 workforce-rate units, 13 “housing choice” voucher homes (very-low-income, for-sale units), and 86 public housing apartments owned by the District of Columbia Housing Authority. “This was a very long, challenging deal structure, with a complicated financial structure,” said Youngentob, “but it’s providing excellent returns.”
“Underutilized properties in established but challenged neighborhoods present a significant opportunity to well-positioned developers willing to accept the greater risks, challenges, and complexities inherent in these types of infill developments,” noted Lester Petracca, president of Whitestone, New York–based Triangle Equities. In 2009, his firm completed Triangle Junction, a three-level, 600,000-square-foot (55,740 m2), Target-anchored retail complex with a 500-car garage set on a three-acre (1.2 ha), inefficiently shaped site, formerly an underused municipal parking lot, near one of the busiest subway stops in Brooklyn. “Staying power is critical” for these types of projects, commented Petracca, noting that Triangle worked with many municipal agencies for more than six years to gain approvals for the project before breaking ground. Since it opened, Triangle Junction has become the new gateway to an existing but economically challenged retail corridor—and a catalyst for further revitalization there.
Finally, Josh Solomon, president of the Boston-based DSF Group, discussed Halstead Square at Dunn Loring, a transit-oriented, high-density, mixed-use project now under construction in Fairfax County, Virginia on an eight-acre (3.2 ha) site adjacent to an existing Metrorail station. The project has received approval for 1 million square feet (92,900 m2) in four buildings, including 900 apartments, 50,000 square feet (4,645 m2) of ground-floor retail space, and a 150-key Kimpton hotel. Construction of the first building, which will contain 242 luxury apartments and 25,000 square feet (2,323 m2) of retail space, began in the first quarter of 2010 and is scheduled for delivery in January 2012. Despite the current economic downturn, “we are seeing an increased appetite from the capital markets for this type of project,” Solomon added.
While the presentations made it clear that developing these types of projects is incredibly challenging, they also revealed the many factors—including high barriers to entry, limited competition, and strong demand—that can also make them incredibly economically rewarding, even in today’s difficult marketplace. In addition, developing them “makes a difference in the community, both socially and environmentally, as they become catalysts for revitalization and improve the lifestyles of residents,” commented Youngentob. “Plus, it’s fun!”